Statoil posted a loss of US$2.76 billion to its net income that the Norwegian giant attributed to its international operations that consisted of expensed exploration wells, high maintenance activity, and impairment charges.
 |
|
Image of Eldar Sætre, from Statoil. |
The $2.76 billion loss is a 151% decline, when compared to the company’s loss of $1.1 billion in Q4 2016.
Adjusted earnings in Q4 2016 came in at nearly$1.7 billion, a 6% decrease from the nearly $1.8 billion in the same period in 2015.
During the period, Statoil expensed exploration wells capitalized in previous periods in the amount of $260 million, contributing to the reduction together with lower European gas prices. Higher liquids prices, strong delivery on the improvement program and solid operational performance contributed positively to the results, the company says.
The Norwegian giant reported an operating income of negative $1.9 billion in Q4, compared to positive $152 million in the same period of 2015. According to Statoil, the result was impacted by $2.3 billion in net impairment charges mainly due to reduced long term price assumptions.
Adjusted earnings after tax were negative $40 million in Q4, down from positive $185 million in the same period last year.
“In the current price environment, we delivered solid financial results from our Norwegian operations and from our marketing and trading activity. Our result was impacted by the negative result from our international operations due to expensed exploration wells, high maintenance activity and impairment charges. We delivered strong production and solid operational performance across all segments in the quarter,” says Eldar Sætre, Statoil president and CEO. “We achieved strong results from our improvement program, $700 million above our target of $2.5 billion in annual savings. These are lasting effects, and we target an additional $1 billion in 2017.”
Statoil’s equity production slightly increased in Q4 t 2.1 billion boe/d, compared to 2 billion boe/d in Q4 2015. The company says that the increase was primarily due to the ramp-up of new fields and strong operational performance.
As of year-end 2016, Statoil had completed 23 exploration wells. Adjusted exploration expenses in the quarter were $607 million, up from $490 million in Q4 2015.
For the full year 2016, the IFRS net operating income was $80 million and adjusted earnings were $4.07 billion. IFRS net income for the year was negative $2.9 billion.
“We have reset our cost base, transformed our opportunity set, and we continue to chase improvements. We have the financial capacity and are ready to invest in our next generation portfolio with radically improved break evens. With a sharpened high value, low carbon strategy, Statoil is well positioned for the long term and even more value driven in everything we do,”says Sætre.
Looking forward, Statoil has adjusted its 2017-2020 outlook, and will invest some $11 billion organically in 2017. The company is estimating a 4-5% production growth to 2017 from rebased 2016 production and organic annual production growth of around 3% from 2016 to 2020. Statoil also plans to allot $1.5 billion for its exploration activity in 2017.
“Statoil has set clear principles for development of a distinct and competitive portfolio. Statoil will develop long-term value on the Norwegian continental shelf, deepen in core areas and develop new growth options internationally, and grow value creation in its marketing and midstream operations,” the company says. “In addition, Statoil is creating a material industrial position within new energy, with the potential to constitute around 15-20% of investments by 2030.”
Subscribe
